Supply Chain Metrics that Matter

Preface

Over the past decade, good business practices did not become great. Scorecards were difficult to balance, and leadership teams struggled to evolve. Today, executive boards are disappointed. Even though companies have spent 1.7 percent of revenue on improving technology, they have not been able to maximize the value that they were expecting to earn in the information economy.

In our research, we find that 9 out of 10 companies are stuck. Growth has slowed, and progress on operating margin and inventory turns is difficult. The answers are not as easy to find as promised.

In this book, we tell the story of a leadership team struggling to make progress. The story is fictional, but the characters and the dialogue are a composite of the teams that we have worked with over the past three years. This team, like many that we work with, finds itself seeking the answers to many questions:

• What drives value in a value chain? What is value? Different industries have matured at different rates. What can we learn?
• How do companies maximize value? Which portfolio of corporate metrics maximizes market capitalization and cash flow?
• How do we move forward? The book is the story of a leadership team finding its way.

Each chapter in this book is written to answer specific questions. The goal of Chapter 1 is to answer the question, “How does a company start the journey?” Chapter 2 answers “How do you build a guiding coalition to drive change?” Chapter 3 introduces the concepts of value ...